Institute for Justice

LA’s Sidewalk Vending Ban Is Unjust and Unnecessary

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IJ Action | November 20, 2015

Sidewalk vending gives aspiring and hard-working entrepreneurs a chance to provide for their families and pursue the American dream. But Los Angeles bans the practice, turning tens of thousands of Angelenos into criminals.

With its low capital and training requirements, sidewalk vending can be a chance to earn a living for people with few other options. The fact that so many people are willing to risk fines and even arrest in order to vend shows how important the opportunity is.

As if stifling hard-working entrepreneurs wasn’t bad enough, Los Angeles’ ban also denies Angelenos the benefits these entrepreneurs can provide. Sidewalk vending improves safety by providing more “eyes on the street,” can bring healthy food into neighborhoods that lack grocery stores, and increases economic activity. A recent study of vendors in New York City by the Institute for Justice found that in 2012 vendors generated an estimated $71.2 million in local, state and federal taxes and contributed almost $293 million in added value to the Big Apple’s economy. LA is missing out.

Because sidewalk vending is so beneficial both to vendors and their neighbors, you’d think that Los Angeles must have a very good reason for its ban. It doesn’t.

If Los Angeles officials are worried that food sold by sidewalk vendors might be unsafe, they needn’t be. An IJ study comparing government food inspection records found that mobile vendors are as safe, or safer, than their brick-and-mortar kin. In fact, in Los Angeles, restaurants had a violation rate 237 percent higher than that of food carts. Los Angeles doesn’t ban restaurants. It shouldn’t ban sidewalk food vendors. Instead, food safety regulations should be very narrowly tailored to protect the public’s health and safety.

Similarly, concerns about sidewalk congestion should be addressed by regulating legitimate congestion issues on sidewalks that present serious safety problems to the public—not by banning economic activity.

Some brick-and-mortar establishments claim that vendors compete “unfairly” with their businesses.

First, sidewalk vendors forego all of the many advantages that come with working out of a building, such as climate control and storage rooms. Vendors compete differently, but not unfairly.

Second, brick-and-mortar establishments actually benefit from nearby vendors. Vendors entice more pedestrians to visit the streets. Some of these pedestrians end up frequenting nearby brick-and-mortar establishments as well—creating a “sidewalk stimulus.” In a case study of three Los Angeles neighborhoods, brick-and-mortar businesses not in close proximity to street vendors lost, on average, five percent of their jobs between 2007 and 2011. For the same period, businesses operating near street vendors maintained employment levels and grew, on average, by five percent.

Finally, regulations designed to protect one business from the competition of another are simply unconstitutional. The U.S. Court of Appeals for the Ninth Circuit, which includes California, has ruled that the government cannot prevent someone from pursuing an honest living simply to protect the bottom line of their more politically connected competition. But that is exactly what some brick-and-mortar establishments are arguing for the city to do by maintaining the prohibition on sidewalk vending.

Los Angeles’ sidewalk vending ban isn’t needed for food safety, it isn’t needed to keep sidewalks walkable, and it isn’t needed to benefit brick-and-mortar stores at the expense of consumers and hard-working entrepreneurs. The Los Angeles Street Vendor Campaign has proposed an ordinance that would replace the ban with a city-wide permitting process for sidewalk vendors. It legalizes the sale of both food and other merchandise and includes food safety regulations and detailed provisions to prevent sidewalk congestion.

The ordinance would require a permit for each vending operation, with permit fees allowing the city to generate revenue from what is currently a black market.

The ordinance would also repeal the draconian punishments currently meted out to vendors. Right now, sidewalk vending is a misdemeanor, leaving vendors with a criminal record. If the new ordinance passes, violations will be addressed by a system of warnings, escalating fines, and eventual suspension of one’s vending license, but not misdemeanor charges.

On Tuesday, October 27, the Los Angeles Economic Development Committee held a public hearing on this issue. Hundreds of people filled the council chambers to show their support for legalization. To their disappointment, the committee did not move forward with legalization but instead asked for more reports.

The committee has been considering sidewalk vending for two years now. Every day they spend gathering reports is another day that Los Angeles’ sidewalk vendors are unjustly criminalized.

The arguments for sidewalk vending are numerous. Whether by providing employment or by bringing goods into underserved neighborhoods, sidewalk vending benefits everyone, especially those on the lowest rungs of the economic ladder. The arguments against sidewalk vending are full of cracks.